Farmers selling at street markets must register for the IAE
The activity of marketing agricultural products in public spaces, such as municipal street markets, raises doubts regarding the need to formalize additional registrations in the Economic Activities Tax (IAE) and its compatibility with current tax regimes.
What the DGT has ruled
The Directorate General of Taxes (DGT) has determined that, in order to sell agricultural products at street markets, registration under heading 663.1 of the IAE is mandatory. This heading corresponds to commercial activity carried out outside of a fixed establishment.
Regarding the taxation of the tax, the ruling indicates that the street vending of non-transformed natural products does not prevent the holder from retaining the special regime for agriculture, livestock, and fishing in VAT. In the event that the products had been transformed, the simplified regime would apply, which is compatible with the special agricultural regime.
Regarding Personal Income Tax (IRPF), the activity may continue to be taxed under the objective estimation method, provided that the limits established in Order HAC/1347/2024 are respected.
What this means for you
If you are an individual dedicated to agriculture and plan to sell your harvests at street markets, having the main agricultural activity is not enough. You must formalize registration under the heading for commerce outside of a fixed establishment to comply with IAE regulations.
This obligation does not entail the loss of the tax benefits of your main activity. You will be able to continue applying the special VAT regime for natural products and, if you carry out any transformation process, you may opt for the simplified regime without it affecting your status as a farmer.
What you should do
It is necessary to verify that the IAE registration is carried out correctly under the relevant commercial heading to avoid sanctions for failure to register the street vending activity. Likewise, income volume should be monitored to ensure that remaining in the IRPF objective estimation regime remains viable according to current regulations.
Frequently asked questions
- Will I lose my special VAT regime by selling at street markets?
- No, the street vending of natural products does not exclude the holder from the special regime for agriculture, livestock, and fishing.
- What happens if I sell agricultural products that have been transformed?
- In that case, the simplified regime would apply, which is compatible with the special agricultural regime.